Deciphering the genetic pathways involved in fundamental aspects of mouse development has contributed significantly towards our understanding of the causes of human congenital abnormalities and tumor formation. The secreted protein Sonic hedgehog (Shh) is a requisite component of one such signaling pathway required to establish patterns of cellular growth and differentiation in many tissues during embryonic development. Within the central nervous system (CNS), Shh is essential for the specification of diverse neuronal cell fates deriving from the ventral portion of the neural tube including, spinal motor neurons, hindbrain serotonergic neurons and midbrain dopaminergic neurons. For Shh to carry out its role as an inductive signal it must be expressed in the correct tissues, at the proper developmental stage, as well as in the appropriate concentration. In humans, the developing ventral forebrain is particularly sensitive to the level of Shh expression given that a 50 percent reduction in the normal dosage causes holoprosencephaly, a structural defect of the brain resulting from the failure to form a ventral midline. In contrast, over-activation of the Shh signaling pathway has been implicated in the generation of several tumors, including medulloblastomas and basal cell carcinomas. These findings indicate that the Shh pathway must be kept under tight regulatory control during pre- and postnatal stages. Studies in Drosophila have identified many of the components implicated in regulating transduction of the pathway downstream of the Hedgehog (Hh) signal and have been shown to function in similar ways during vertebrate development. Little, however is known of the transcriptional requirements functioning to activate Shh at its sites of embryonic expression. The experiments outlined in this proposal are aimed at identifying the genes that regulate Shh transcription in the axial mesoderm and ventral midline of the neural tube, two signaling centers from where Shh has been shown to exert its inductive influences on ventral CNS differentiation. A mixture of standard and novel reporter assays carried out in transgenic mice will be used to ascertain the identity of the cis-acting regulatory sequences and the factors that bind to them, functioning to coordinate Shh transcription in the embryo. Multiple genes operating in a combinatorial manner have been predicted to regulate Shh in a regionalized manner within the CNS. An understanding of how Shh expression is initiated in the ventral forebrain may provide insight into additional causes of holoprosencephaly.